The regional variation in Inheritance Tax (IHT) is highlighted in the latest HMRC figures, with almost half of the UK’s IHT liability in London and the Southeast.
The data is from estates that passed away in 2023 and 2024 and was published on 30 July 2026. Across the UK, 30,400 deaths resulted in an IHT charge, creating £7.03 billion of tax liabilities, £330 million, or 5%, more than the previous year. Although the number of taxpaying estates fell by 3.6%, the proportion of UK deaths resulting in an IHT charge rose to 4.72%, the highest since 2006 to 2007.
Where is the IHT Burden Highest?
The Southeast recorded 6,310 taxpaying estates and £1.83 billion of IHT liability, while London recorded 4,810 estates and £1.43 billion.
Together, London and the Southeast accounted for 46% of all IHT charges across the UK and 55% of the liability in England. HMRC also reported that the average tax charge for a taxpaying estate in London was £297,000.
The lowest numbers of taxpaying estates were in the North East, Northern Ireland and Wales. HMRC said this may partly reflect lower house prices and therefore lower values of wealth transfers exceeding available tax-free allowances.
What the Figures Mean?
“The figures do not mean that different UK regions have different IHT rates. HMRC says the regional breakdown is illustrative. For deaths in 2023 to 2024, IHT was still based on the deceased’s domicile rather than their reported residence or the location of their main UK home.’’
The basic rate of IHT is 40% on the value of the estate exceeding the threshold. The basic nil-rate band is £325,000. If the home qualifies for inheritance tax exemption, this can rise to £500,000 if it is passed on to a direct descendant.
Moreover, the £325,000 nil-rate band is fixed until 5 April 2031. Overseas assets can be included in IHT for some individuals who are long-term UK residents, replacing the former domicile rules since 6 April 2025.
The 2023 to 2024 figures also pre-date important changes now relevant to planning. For deaths on or after 6 April 2026, 100% Agricultural Relief and Business Relief on qualifying property is limited to a combined £2.5 million allowance. From 6 April 2027, most unused pension funds and pension death benefits will also be brought within the value of an estate for IHT purposes.
What Readers Should Do Now?
For families with significant property, investments, business assets or overseas wealth, the figures are a reason to review estate planning early. HMRC says the average IHT bill across taxpaying estates reached £231,000 in 2023 to 2024.
A review should cover:
- The current value and structure of the estate;
- Available spouse, residence, business or agricultural reliefs;
- Gifts, wills, pensions and residence status under current HMRC rules.
Where IHT is payable, it is generally due by the end of the sixth month after death. HMRC charges interest on late payments; as of August 2026, the rate is 7.75%. A payment towards IHT is also usually required before probate can be obtained.
How Can Lanop Help?
Regional differences highlight a key fact: whether someone is exposed to IHT depends on the estate’s value and its structure, not just where they live.
Lanop can support families, business owners and individuals through the estate review process to understand what estate they are in, what reliefs and allowances are available, and to set up reporting and payment before it becomes an issue. Early planning can provide a clearer view of potential liability and help ensure available reliefs are considered properly.
